Rosneft to attract Chinese, Korean investment to Arctic shelf

Feb 19 2013

Artem Zagorodnov

RBTH

Igor Sechin, former Deputy Prime Minister and currently CEO of
Russia’s largest oil company (Rosneft), concluded a three-day visit to
China where he met with the heads of its three largest oil companies,
CNPC, Sinopec and CNOOC. Rosneft and the Chinese companies agreed to
form a working group to study possible joint development of Arctic
shelves in the Barents and Pechora Seas.

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Sechin had previously visited South Korea and met with the heads of
KOGAS and STX (a world leader in ship construction, construction
supplies and hydrocarbon extraction).

“[A] partnership with this
companies will give us access to new technologies and will open new
markets for exporting LNG,” commented Rosneft. Valery Nesterov of
Sberbank Investment Research confirmed that cooperation with these
companies would help Rosneft utilize new technologies to accelerate
development of the fields.

In addition, Rosneft has signed a memorandum of mutual understanding with Sinopec that envisions the possibility of increasing oil deliveries to China, a company representative told Interfax.

"Agreement in principle on increasing deliveries has been reached. Documents have been signed that make it possible to begin substantive negotiations," this source said.

The Rosneft representative said that during a visit by Rosneft President Igor Sechin to China agreements were also signed with China National Petroleum Corporation (CNPC) concerning joint efforts in geological prospecting and resource extraction on Russia's continental shelf. Chinese companies have been offered involvement in offshore projects in the Barents and Pechora Seas.

Russia is supplying China with 15 million tonnes of oil annually via an offshoot of the Eastern Siberia - Pacific Ocean pipeline (ESPO). Rosneft and Russian oil pipeline company Transneft concluded 20-year agreements in 2009, under which deliveries began on January 1, 2011. In return for the long-term deliveries, Rosneft received from Chinese banks a credit of $15 billion and Transneft obtained one of $10 billion.